Banks seek to bolster financial standing with capital hikes

Ho Chi Minh City-based commercial lender Nam A Bank will be holding its AGM on March 29, seeking approval from shareholders for its 2024 targets, and the 25 per cent dividend payment plan through stock bonuses to raise charter capital.

Nam A Bank aims to raise its charter capital to above $570 million this year and $675 million in 2026.

Of the proposed $131 million capital addition this year, about $110 million, equal to over 264.5 million shares shall be distributed to existing shareholders through share bonuses, and almost $21 million, equal to 50 million shares, shall be sold to employees through an employee stock-ownership scheme.

Meanwhile, Hanoi-based retail bank LPBank will be hosting its AGM on April 27. After raising its charter capital by over $345 million last year, the bank is to unveil a plan to further bolster its capital resources, with concrete figures yet to be published.

With $1.06 billion in charter capital, LPBank is currently the tenth-largest commercial lender in the system.

Military Commercial Bank (MB) is also expected to submit to its AGM a capital hike plan for 2024 through dividend payments in form of share bonuses. An option for dividend payment in cash could also be considered at the AGM slated to take place on April 19.

With charter capital touching $2.17 billion, MB is currently ranked fifth in the system.

Major state lenders, however, are not the outsiders of the financial health empowerment drive. Vietcombank plans to seek shareholder approval for its capital hike plan through dividend payment in shares using 2022 undistributed profit sources approximating $904 million. The bank’s AGM is set to take place on April 27.

If approved by the State Bank of Vietnam (SBV), the bank’s charter capital could reach $3.2 billion.

Similarly, VietinBank is also mulling over raising its financial standing. The bank has got the go-ahead from the SBV and the Ministry of Finance to retain its 2022 profits in their entirety for its capital hike plan.

The bank plans to seek approval from relevant management authorities to keep back its entire annual profit volume for the 2024-2028 period for the purpose of raising capital, bolstering financial capacity, and expanding credit growth space.

Last year, 20 out of 27 listed banks had embraced capital hikes, with VPBank garnering the largest capital jump. After finalising a 15 per cent stake sale to Japan's SMBC Group, the bank possesses ample capital sources.

It had also completed dividend payment in shares to raise charter capital from $2.8 billion to $3.3 billion, becoming the largest bank by that metric, far ahead of the second and third banks on that list.

Singapore's Thomson Medical Group is in talks to strengthen its controlling stake in FV Hospital, potentially acquiring a substantial $400 million equity sale.

The State Bank of Vietnam (SBV) on February 20 net injected more than 5 trillion VND (nearly 204 million USD) into the banking system through the open market operation (OMO) channel to support capital for commercial banks.

Vietnam continues to be a magnet for Thai investors who are spreading their wings to the neighbouring country to tap into lucrative opportunities.